Data for Newark General Hospital Essay

A. exercise and fork over the gather variance.Profit sectionalization = true Profit quiet Profit= 0.3 0.6= -0.3In words Newark General hospital was $300,000 below standard, and made less bring in than their expectations.B. Calculate and interpret the Revenue variance.Revenue partition = real(a) Revenues Static Revenues = 4.5 4.7= -0.2In words Newark General infirmary was $200,000 below standard, and generated less tax revenues than their expectations.C. Calculate and interpret the Cost variance.Cost sectionalisation = Static be positive cost= 4.1 4.2= 0.1In words Newark General Hospitals $100,000 toll variance indicates that realized cost was much great than expected.D. Calculate and interpret the strength and price variance on the revenue side. gaudiness Variance = supple Revenues Static Revenues = 4.8 4.7= 0.1 hurt Variance = Actual Revenues Flexible Revenues = 4.5 4.8= -0.3These variances enounce that higher than expected volume should have resulted in revenues creation $100,000 greater than expected. However, this potential revenue increase was partially offset by particular that realized prices were less than expected. The end result of higher volume at lower prices is realized revenue that was $200,000 less than forcasted.E. Calculate and interpret the Volume and management variances on the cost sides.Volume Variance = Static Costs Flexible Costs= 4.1 4.1= 0In words Newark General Hospital had no affect of volume to the costs of the Hospital, so, there was no careen in the volume, which leaded to higher cost.Management Variance = Flexible Costs Actual Costs=4.1 4.2 = -0.1In words, in the Hospital cost intrude on happened by several(prenominal) factor which are either controllable or can be controlled by management.F. How are the variances calculated above associate?Explaining variances in financial statements is vital to the success of a business. Variances are the dissimilitude between cyphered amounts and actual income or expenses. Managers use variance reports to make changes infinancial forecasts and monitor the performance of a business or organization. Variance explanations might prompt a manager to put stronger financial controls in place or to reallocate resources.8.2 2007 revenues for the Wendover Group Practice Association for quadruplet different budgets, in thousands of dollars Flexible Flexible Static Budget (Enrollment/Utilization) (Enrollment) Actual Results Budget Budget $425 $200 $180 $300 A. What does the budget data tell you about the nature of Wendovers patients Are they capitated of fee-for-service? As per the budget data given for Wandovers patients are capitated that is why information is separate into two flexible budgets, i. maven for flexed for both enrollment and custom and, ii. One flexed only for enrollment.B. Calculate and interpret the following variances.i. Revenue Variance= Actual Revenue Static Revenue= 300 425= -125Which indicates negative vari ance, so that revenue was $125,000 less than expected. ii. Volume Variance= Flexible Revenues Static Revenues= 200 425= -225iii. Price Variance= Actual Revenues Flexible Revenues= 300 200= 100 present lower than expected volume should have resulted in revenuebeing $225,000 lower than expected, however, this potential revenue decrease was partially offset by the fact that realized prices were more than expected. The end result of lower volume at higher prices is realized revenue that was $125,000 less than forecasted. iv. Enrollment Variance= Flexible (Enrollment revenues) Static revenues = 180 424= -245v. Utilization Variance= Flexible Revenues (Enrollment/Utilization) Flexible = 200 180= 20The volume variance can be broken down further. Enrollment changes (deficiencies) caused a $245,000 shortfall from budget. However, practice by the enrolled population was slightly down, which produced $20,000 in unexpected profit. Together, the enrollment shortfall and utilization decre ase resulted in a volume shortfall of $225,000. In essence, some of the enrollment deficiency was offset by improvement in utilization control.